(a) Total reserves of a non-renewable resource are 250 million tonnes. Annual consumption, currently at 20 million tonnes per year, is expected to rise by 2% a year. After how many years will stocks be exhausted? (7 Marks)

(b) A small business has a choice of investing $20, 000 in one of two projects. The revenue flows from the two projects during the next four years are listed in the table below. If the interest rate is 11% compounded annually, which of these two projects would you advise the company to invest in? Revenue ($) End of Year Project A Project B 1 6,000 10,000 2 3,000 6,000 3 10,000 9,000 4 8,000 1,000 Total 27,000 26,000 (6 Marks)

(c) A small factory in Malaysia has produced 200 items. It would like to expand its operations and produce 300 items but only has Rs 20,000 available to fund expansion. It is known that marginal cost = = 4 at this stage. What would be the total cost for the next 100 items to be manufactured? Can the factory afford it? (6 Marks)

(d) If fixed costs are 4, variable costs per unit are 1 and the demand function is P = 10 2Q obtain an expression for the profit function in terms of Q and hence sketch a graph of against Q. (a) For what values of Q does the firm break even? (b) What is the maximum profit?